MA Business Success 50: Paid Trials vs. Free Trials - The Pros and Cons of Offering Trial Periods

Watch the video below Listed to the podcast below Phil: And we're coming at you with another great topic to help you guys take your school from where it is to where you want it to be. So today's topic that we're going to be talking about is something that gets addressed a little bit with people who contact us, and even we at our school toy with both of these type of topics. And what we're talking about is paid trials versus free trials. Graham, what've you got, mate? Graham: You know, we've done full circle, Phil. We've done full circle and will continue to do that as the market changes and the climate and people's needs change. Free trials, you get every man women and dog, and volume, definitely. But then you talk about the pay trials. You're looking to qualify people a little bit more. You tend to have people probably a little bit more serious that come to those ones. But again then you're looking at, I guess your sales strategy. Better make sure that's locked down tight because if you've got less people coming in and you're not converting as many as you need to, well, there's the issue. So there's so many factors to it, but definitely I find that with the free trials, you're going to get a hell of a lot more volume of people coming through the doors. Phil: Yeah, I guess, and obviously the difference is dollars. But I would probably argue the fact that you're not really doing a pay trail to make money. You'll just be doing it to qualify the potential leads. Yes, the bucket opening will be smaller, whereas free trials you're looking at letting more and more people in, therefore filtering them out as you go through the introductory process. But I know that, for example with brand spacing, so we do a lot of shopping center displays, and fairs and fetes at schools. And all that sort of stuff, the spin wheel, it's all win free this, it's free that, get this free class. And we get so many inquiries and then it's a lot of work, a lot of work for our guys to filter through those guys and actually get the qualified ones that want to join. Graham: Phil, look, you sort of touched on it there. Let's break it down a little easier for the guys watching and listening. What are the benefits and what are the challenges with a free trial? You sort of mentioned there that benefit, you get the volume. So you're going to get a whole lot more people coming in, knocking on the door, but the hindrance behind that is the follow up process and being able to accurately both call everybody, make sure you meet the needs of everybody, make sure you've got the manpower to be able to make all those phone calls. What other challenges could be in there with having more volume? Phil: Just one thing that comes up because it came up in one of our meetings was just they're unable to contact. There's that long list of people you just cannot contact because there's no real reason for them to know, and if they know that number and they're not committed, you know, it's, "Ah, screw it, it's the martial arts guy." Graham: Hey, guys, I'm going to throw a question out to you guys who's listening and watching. Do you have the same challenge with people nowadays? The world is changed, and people will screen your calls, and they'll not answer you back? What challenges do you guys face? If you can, send us an email at [email protected]. We'd love to hear from you to see if you guys around this world are finding the same issues. Phil: Yeah, leave a comment on the blog post, too, gang. But, yeah, I think initially it's those guys that haven't put any investment down initially, they're harder to follow up with, hard to get contact, harder for them to come and see your school. And then I guess the question is, I suppose, is if they haven't paid anything to come and do your trial and then you're showing them the fees and your fees might be quite high, or whatever, I don't know. It's like, does the paid fee match the joining fee, match the student fee or the ongoing fee, do you know what I mean? Or is it just a nominal fee just to open the wallet or just to get them committed, you know? There's that sort of balancing act there. Graham: So you certainly touched on a few points there. With a free trial it's a taste test. It's just enough. And for some people, they really will take free as that, "Yep, I'm in. I'm on." And you're going to get those rare few. And look, I won't even say rare because we've done this quite a few times. But you look at the conversion rates with the free trials and sometimes nowadays you're looking at a 50-50, with people actually committing to picking up the phone and coming in. So that's a whole lot of work without any result. But then you look at, okay, let's just say the person has come in, Phil. What are some of the benefits of that free trial? Because, again, we don't have a personal preference on each one because we certainly do both, and it's always ever growing. What are some of the benefits though with that free trial which we have offered? Phil: I guess it's that sort of taste taste. They get to see the school, experience what it's about, no strings attached. There's no commitment at that level. And again I guess it's also, it is a tripwire. So there's a tripwire for two reasons. There's a positive and a negative for having a tripwire. And the tripwire is the fee to do a trial. So the tripwire might be lowered when it's a free trial, which gets more people in, but it also may stop people as well. But I think when it comes to that whole, the next part is once they're in the school, it's that, and I think we've had a question come through as well from one of the guys, and it's an ongoing thing is when do you talk about your fees? How do you say it? How much? How do you deal with all that? We've dealt with that on another podcast. We might mention something a little bit later. But there's that whole taboo thing during your trial period on are they seeing the value of what you're about to show them the value is, the cost of the class? And are they going to walk out of that trial thinking, "Yes, this is a great value," or, "No, not for me,"? Graham: What is the length of a trial though? Again, I'm sure there's somebody that's listening in. What do you give them? What's a substantial amount? Because again we're talking free here, so you don't want to give them the whole kitchen sink. A year free, jeez, that'd be a great thing, but that's certainly something not realistic. What is a decent length? Is there a set length? Is that something that's varied depending on the climate where we're at? The student leads? Phil: Yeah, I think it changes with times, because I know when we first kicked on it was like a month free. Four weeks free. And you definitely knew those guys who were hanging around that time were pretty much set and they liked it. Usually the guys who did one or two classes and then faded off were the ones that didn't enjoy the classes. But then you had all those unable to contact ones as well. Then we went to two week free, and that was good. That got some great results. It was still a fair decent chunk, two weeks free. But people were thinking that they could come to as many a class as they could, and unannounced, and all that sort of stuff. And then we went all the way down to just two classes. So you do your intro, you do class one, class two, and then join up. And I think we're experimenting now, not that we've put it in practice, but we're looking at improving that process again. Graham: Most definitely. Look, we're always, always reinventing our processes. Not necessarily scrapping things, but looking at how we can do things better. And I think that's something you've got to continually do. Continually sharpen the sword, continually stay ahead of the curve. Never just get complacent and sit back on your laurels and think what worked this year is going to work next year because that's not the case. And we certainly are big believers in that. For the guys listening as business owners or even just mangers, if you take your eye off the ball and think set and forget, you're going to find yourself in a world of hurt real quick. So we sort of talked about some of the benefits of obviously the free trial, and that is the volume. You're going to get them in and maybe get them over that little bit of a hump and the hurdle. The negative being you've got that volume of people and you have to then have the staff and the man-hours to be able to get through all of that, plus deal with that people just blocking you on the phones, or just not picking up. It's not the right time. Let's flip over now to the pros and cons to a pay trial. So for me in particular, I know that when we first started, Phil, we were charging I think $19.95 for two weeks free and a uniform included in that. Now this is back in 2000 mind you, so it's been 16 years since we had that offer in place. So again there's, definitely, the benefit of having a pay trial was qualifying people. People are serious. We've said this often, and again we don't have a preference either way as such, which is why we ask lots of questions to the guys listening and following along, but for us qualifying a person as a potential client is key. Really making sure they're serious. So having that small investment first and foremost means that they're a little bit more committed, they're a little bit more serious about turning up to that allocated time and that program as well, too. And making sure that then they'd had a little bit of a taste test. But again, you've got to decided on what is that pay trial? What does it look like? What does it entail? So that you can really get the most from it. Phil: I've got a bit of another experience with running events and Graham and I run multiple different types of events, both personal and professional development. And free has no value. And if I look at my experience with running events how you might have 100 people registered to come, and you might have say 50 of them were a free ticket and then the other 50 paid a nominal fee of $10, I guarantee you almost 100% of the free will not turn up. Or a very small percentage, and that's my experience. And then you'll get the ones who paid a nominal fee, like the tripwire, it's the $10 or $5, just to say, "Yep, I'm in. I'm committed," they will generally always turn up. So that's my experience with the events. And we take that back in to martial arts and we're actually going to be trialing the paid booking fee for our shopping centers coming up on next school holidays. So we're just going to, before it was always, "Win free, free, get classes and come down," but then we'd have this massive pool of people, and then all of them would be unable to contact, couldn't make it, all these things. So now we're going to do just a nominal booking fee right there and then. We're going to do like a $10 booking fee, and with that $10 they get a certain amount of free classes and etc., etc., just to come down. So we will test and measure and we'll let you guys all know how it turns out, because that's what it's all about. As Graham and I have just said, we have gone full circle with a lot of things, offering massive free trials, pay trials, this, that, and it's always about cosm. Constant and and never ending improvement. And again, times change, economics change, the industries change, employment changes. So you've got to sort of work with it ever so slightly, and not that you're going to change your whole business model, but you have to work around the times that we live in. Graham: Are there any negatives to a pay trial? What are your thoughts? Phil: Definitely, I think that the negative is literally, it's just asking people for money upfront. It might come across as someone being a bit more money hungry or they're doing it just for money, but I think my argument for that is if it's done in a sincere way, for example, "We're a full time professional martial arts school. We have people booked in for weeks in advance, and this spot specifically would be saved just for you by putting down a $10 booking fee. People are applying to our school and not everybody gets in. So by paying this small nominal fee just ensures that you have your time slot set at our school. Otherwise you might miss out and it could be months later until you come down to our school." And literally that, and I'm not saying I'm telling a lie, we are booked up. Yes, people cancel, and that's what might happen, but we want to make sure we qualify them and understand the importance. And I think that's the difference that makes a difference is when you tell someone that they can't have something they want it more. All right? So that's that. If I say, "I'm not sure if you can come down to classes. We're fully booked up. You might not be able to. But if you pay a nominal fee then I'm sure we'll get that one spot for you." So anyway, it's a test and measure thing. We'll be doing it very soon, and we'll let you all know how that goes anyway. Graham: Hey guys, I guess there's one thing that Phil pointed out right at the very, very start of this podcast is you don't charge for trials to make money. They're there, the small fee that you charge is to qualify the potential client. It's not there to make big bucks off of them. So don't think of this as an extra revenue stream that you can count upon. It's definitely something that we do just to put that small little roadblock to see how serious they are, because at the end of the day I know that with all the different marketing streams that we have you're going to get a whole lot of tire kickers. And when you think about it, the time, ROI, return on investment, our time put out there, both marketing dollars but then staff hours and time, having that small roadblock, that little bit of a step that they have to get over definitely makes the guys on the other side of that, and the people who bust through or take that opportunity a hell of a lot more easier to deal with. And the chances of converting them to make them a client of yours is a greater one. Phil: Absolutely. Well guys, I think that's a wrap, if you've enjoyed this podcast, please let us know. Leave some comments. Get in touch with us via our email, [email protected]. We'd love to hear from you guys and that's what we're all about. It's about giving every single one of you people out there the tips, tools, and strategies, even if we don't know it, let's just open up a conversation. I think today really was just a conversation where we're neither one side or the other. We would be really interested to hear what other people think about it, and I hope that's what we do. We just open up a thought in your mind of something to think about it, and bring something to the table. So if you're interested in getting in touch with us, leave a comment, get in touch with us on our email. Don't forget our special discount, guys, our offer that we have for you, gang. If you're interested in joining up and being part of our online membership where we get lots of cool stuff, it's just $99. You get access to both silver and gold, and we're actually going to throw in a free one hour coaching session. So the value of that, gang, is just shy of $900. So if you've got a question or something, spend an hour with us, you never know, we might be able to just thrash it out and help fix your problems out there. Graham: I was just going to say, before we sign off, we always, always remind you guys, TIMA, what we're about, believe, begin, become, you know? Believe in yourself, believe in the process, begin that amazing journey, become the person or have the business that you guys so desire, and want to be. So guys, go at it, take it by the horns, and we'll see you on the flip side. Phil: See ya.